Court Awarded Damages of Nearly $42 Million in Bankruptcy Case

Coherent’s client, Salvatore LaMonica as Chapter 7 Trustee for the Estates of TransCare Corporation, has prevailed at trial in a case brought against Lynn Tilton and her firm Patriarch Partners in U.S. Bankruptcy Court in the Southern District of New York. Coherent Economics Senior Affiliate Dr. Jonathan Arnold testified on behalf of the Trustee at trial, and on July 6, 2020 the court awarded damages of nearly $42 million based on Dr. Arnold’s testimony.

This case involves the bankruptcy of ambulance services company TransCare Corporation. The Trustee alleged that leading up to TransCare’s failure, Tilton and her investment vehicle, Patriarch Partners Agency Services LLC, determined not to make capital contributions to TransCare or permit TransCare to sell off assets to generate liquidity that would have staved off failure. Instead, the Trustee alleged that Tilton breached her fiduciary duty to TransCare and developed a plan to create a new company with TransCare’s most valuable assets, foreclosed on those assets through lenders she controlled while consenting to the foreclosures in her role as TransCare’s sole director, and then attempted to sell the assets to a new business under her control while the rest of TransCare Corporation went into liquidation.

In his opinion, U.S. Bankruptcy Judge Stuart Bernstein concluded that Dr. Arnold “developed an appropriate” method for computing damages resulting from Tilton’s conduct, and adopted Dr. Arnold’s analysis as the basis for his $41.8 million damages judgment against Tilton, as well as his alternative judgment against Patriarch Partners Agency Services LLC of $39.2 million.

The Trustee was represented by Bijan Amini and Avery Samet at Amini LLC. Dr. Arnold was supported by a team at Coherent including Laurel Van Allen, Agustina Levy, Dr. Dora Altschuler, Kelsey Shaw, and Sebastian Peinado.

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